Court of Appeals of Illinois, First District, Sixth Division
THE EMPLOYEES' RETIREMENT SYSTEM OF THE STATE OF HAWAII and THE STATE OF HAWAII ex rel. STEPHEN JACKSON, Plaintiff-Appellant/Cross-Appellee,
CLARION PARTNERS, LLC, and ING CLARION REALTY SERVICES, LLC, Defendants-Appellees/Cross-Appellants.
from the Circuit Court of Cook County. No. 12 L 11919
Honorable Sanjay T. Tailor, Judge Presiding.
JUSTICE DELORT delivered the judgment of the court, with
opinion. Presiding Justice Hoffman and Justice Rochford
concurred in the judgment and opinion.
1 Plaintiff Stephen Jackson filed this qui tam
lawsuit under Hawaii's false claims statute, Haw. Rev.
Stat. § 661-21 et seq. (2014) (Hawaii False
Claims Act), against defendants Clarion Partners, LLC, and
ING Clarion Realty Services, LLC. The circuit court granted
summary judgment to the Clarion defendants. Jackson appeals
that decision. The Clarion defendants have filed a
cross-appeal claiming that the court erred by denying their
request for certain costs which they contend were recoverable
under Hawaii law. We affirm.
3 The following facts are drawn from the pleadings and the
evidence produced during discovery and presented to the court
at the summary judgment stage. Plaintiff Stephen Jackson is a
licensed Illinois real estate broker. The Employees'
Retirement System of the State of Hawaii (HERS) is a Hawaii
state agency responsible for providing retirement benefits
for Hawaiian state and county government employees. Defendant
Clarion Partners, LLC (CP), is an Illinois limited liability
company in the business of providing investment advice to
institutional investors, such as pension funds. Defendant ING
Clarion Realty Services, LLC (CRS), is an Illinois limited
liability company in the business of providing property
management services. Before 2011, CP and CRS were owned by
ING Bank. In 2011, CP purchased its assets from ING Bank. CRS
remained part of ING Bank.
4 In October 1997, HERS entered into a contract with CP. The
contract provided that CP would "acquire, operate and
dispose of interests in real estate" for HERS in a
manner consistent with the contract itself, the State of
Hawaii's real estate guidelines, and an "Annual
Tactical Plan." The contract stated that CP would, among
other things, (1) negotiate the terms and conditions of the
sale of properties, (2) execute closings, (3) oversee
properties CP owned for HERS, and (4) collect rents. The
contract stipulated that any property acquired by CP for
HERS's benefit be held in "limited liability
entities" as permitted by Hawaii law. In accordance with
this provision, CP and HERS formed a limited partnership
named CP/HERS LP, with CP as the general partner and HERS as
the limited partner. Additional CP/HERS LPs were formed to
manage each individual property CP acquired for HERS pursuant
to the contract.
5 The contract also included a procurement form entitled
"General Conditions" which the State of Hawaii used
in its contracts. Three of its provisions are pertinent to
this case. Paragraph 35 required CP to "comply with all
federal, state, and county laws, ordinances, codes, rules,
and regulations" that may "in any way affect"
CP's performance of its contractual obligations.
Paragraph 2(d) stated that CP was "responsible for
obtaining all licenses, permits, and certificates that may be
required in order to perform this Agreement." Paragraph
3(b) required CP to "ensure that [its] employees or
agents are experienced and fully qualified *** and that all
applicable licensing and operating requirements imposed or
required under federal, state, or county law, and all
applicable accreditation and other standards of quality
generally accepted in the field of the activities of such
employees and agents are complied with and satisfied."
6 After the contract became effective, HERS allocated $100
million to CP, which CP in turn used to acquire ten
properties located in Massachusetts, Texas, Florida,
Virginia, Washington, D.C., and Northbrook, Illinois. The
Illinois properties were acquired on January 7 and July 1,
1998. They were owned by CP/HERS Northbrook, a CP/HERS LP
established specifically for their administration and
7 In 2006, CP began the process of selling HERS's real
estate portfolio. In connection with that task, CP-in its
capacity as general partner of CP/HERS Northbrook LP-hired
HiGroup, a real estate brokerage firm, to broker the sale of
the HERS property located in Northbrook. At the time, Jackson
was employed by HiGroup. In April 2007, before the sale of
the Northbrook properties closed, a commission dispute arose
between Jackson, HiGroup, and CP. That dispute culminated
with Jackson filing a lawsuit against HiGroup and CP in the
Circuit Court of Cook County. See Jackson v. HiGroup, 07 L
8058 (Cir. Ct. Cook Co.) (Jackson I).
8 In Jackson I, Jackson brought, among numerous
other claims, a claim for breach of contract, promissory
estoppel, and a violation of the Whistleblower Act (740 ILCS
174/1 et seq. (West 2014)), against HiGroup and its
executives, and a qui tam claim against CP and CRS
on behalf of the State of Illinois. In the qui tam
claim, Jackson alleged that CP, which was not a licensed
Illinois real estate broker, engaged in conduct which
constituted the performance of "licensed
activities" under the Real Estate License Act of 2000.
225 ILCS 454/1-1 et seq. (West 2006) (Act). The
circuit court struck Jackson's qui tam claim
without prejudice in December 2008.
9 In an amended complaint, Jackson again brought a qui
tam claim on behalf of the State of Illinois alleging
that CP had violated the Act. Among other things, Jackson
alleged that (1) by virtue of its "activities as
property manager, " CP was required under the Act to
obtain a real estate broker's license and (2) CP had also
violated real estate licensing laws that were similar to the
Act in Hawaii, Texas, and Massachusetts, insofar "as
they related to the various INGentities and employees involved in
the Northbrook Property."
10 In May 2009, the circuit court dismissed the qui
tam claim in Jackson's amended complaint, without
prejudice, pursuant to section 2-615 of the Code of Civil
Procedure (Code). 735 ILCS 5/2-615 (West 2008). Jackson did
not replead his qui tam claim. In January 2012,
Jackson I proceeded to a jury trial on Jackson's
breach of contract, promissory estoppel, and whistleblower
act claims against HiGroup and its executives. The jury
ultimately returned a $183, 588 verdict in Jackson's
favor on his promissory estoppel claim against
11 On October 18, 2012, Jackson filed this lawsuit against CP
and CRS under the Hawaii False Claims Act (Haw. Rev. Stat.
§ 661-21 et seq. (2014)) on behalf of HERS and
the State of Hawaii. (We henceforth refer to this case as
Jackson II.) As in Jackson I, Jackson once
again brought a qui tam claim against CP and
CRS-though this time, under the Hawaii False Claims Act
(rather than under Illinois law) and on behalf of the State
of Hawaii and HERS (rather than the State of Illinois). And,
just as in Jackson I, the central premise of the
qui tam claim in Jackson II was
Jackson's allegation that CP and CRS, "[d]espite not
being licensed as required under the [the Act] and under the
laws of other states, *** ...